Exhibit 10(o) McDonald’s Corporation Severance Plan ARTICLE I Statement of Purpose McDonald’s Corporation has established the McDonald’s Corporation Severance Plan to provide financial assistance through severance payments and other benefits to employees on the United States payroll who are subject to United States taxation and whose employment with McDonald’s Corporation is terminated in a Covered Termination. The Plan is intended to be an unfunded welfare benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended, and a severance pay plan within the meaning of the United States Department of Labor regulation section 2510.3-2(b). All prior existing severance pay plans, programs and practices for employees, whether formal or informal, are hereby revoked and terminated for Covered Employees. This document applies to Covered Employees whose Covered Termination occurs on and after April 1, 2006. ARTICLE II Definitions Base Pay. ―Base Pay‖ means the base salary or base wages that a Qualifying Employee earns during a week, based upon rate of pay in effect for the Qualifying Employee immediately before the Qualifying Employee’s Termination Date, excluding overtime or any special payments; and is used to compute the amount of Severance Continuation Pay under Section 4.1 of the Plan. Cash Payments. ―Cash Payments‖ mean the combined lump sum payment of Severance Continuation Pay or other cash payable to a beneficiary in the event of a Qualifying Employee’s death before all benefits under this Plan have been paid as described in Section 5.2 of the Plan. Cash Performance Unit Plan (“CPUP”). ―CPUP‖ means the McDonald’s Cash Performance Unit longterm incentive plan for eligible Officers of McDonald’s Corporation. Cause. ―Cause‖ means any one or more of the following: (a) an employee’s commission of any act or acts involving dishonesty, fraud, illegality or moral turpitude; (b) an employee’s willful or reckless material misconduct in the performance of his or her duties; or (c) an employee’s willful habitual neglect of material duties; provided, however, that for purposes of clauses (b) and (c), in the case of a Change of Control Termination, Cause shall not include any one or more of the following: (i) bad judgment or negligence; (ii) any act or omission that the Covered Employee believed in good faith to have been in or not opposed to the interest of McDonald’s Corporation or a successor employer (without intent of the Covered Employee to gain, directly or indirectly, a profit to which the Covered Employee was not legally entitled); or (iii) any act or omission with respect to which a determination could properly have been made by McDonald’s Corporation or a successor employer that the Covered Employee met the applicable standard of conduct for indemnification or reimbursement under McDonald’s Corporation’s or a successor employer’s by-laws, any applicable indemnification agreement, or applicable law, in each case in effect at the time of such act or omission. 30
Change of Control. ―Change of Control‖ for purposes of this Plan shall have the same meaning as the definition of ―change of control‖ in McDonald’s Corporation 2001 Omnibus Stock Ownership Plan, as amended from time to time. Change of Control Termination. ―Change of Control Termination‖ means, solely with respect to an employee of McDonald’s Corporation or any successor employer who is in the leadership compensation band or below at the time of his or her termination of employment, a termination of such employee’s employment with McDonald’s Corporation or any successor employer during the Post-Change of Control Period for any reason other than (i) death or total and permanent disability, (ii) by McDonald’s Corporation for Cause, or (iii) voluntarily by such employee. Notwithstanding the foregoing, a Change of Control Termination will also include an Officer’s voluntary termination of employment during the Post-Change of Control Period if the Officer terminates his or her employment for Good Reason. Claim. ―Claim‖ means a written application for Severance Benefits under Section 9.1 of the Plan. Claimant. ―Claimant‖ means any individual who believes that he or she is eligible for Severance Benefits under this Plan and files a claim pursuant to Section 9.1 of the Plan. COBRA. ―COBRA‖ means healthcare continuation coverage that meets the requirements of Section 601 et seq. of ERISA and Section 4980B of the Code (―COBRA‖). COBRA Coverage. ―COBRA Coverage‖ means the monthly cost of providing healthcare continuation coverage for a qualified beneficiary under COBRA. Code. “Code‖ means the Internal Revenue Code of 1986, as amended. Company Service Date. ―Company Service Date‖ means an employee’s first day of full-time employment or benefits eligible part-time employment with McDonald’s Corporation as determined by McDonald’s Human Resources Department. Compensation. ―Compensation‖ means the defined term under McDonald’s Corporation Profit Sharing and Savings Plan, McDonald’s Corporation Excess Benefit and Deferred Bonus Plan and any other longterm incentive plan, welfare benefits plan, deferred compensation arrangement, fringe benefit, practice or policy maintained by McDonald’s Corporation as described in Section 6.3 of the Plan. Covered Employee. ―Covered Employee‖ means an employee of McDonald’s Corporation who has been notified by McDonald’s Corporation that he or she has a Covered Termination making them eligible for Severance Benefits under the Plan as described in Article III; provided, however, that an Officer will not fail to be a Covered Employee merely because McDonald’s Corporation fails to provide a notice of Covered Termination to an Officer who has a Change of Control Termination due to his or her voluntary termination of employment for Good Reason during a Post-Change of Control Period. Covered Termination. ―Covered Termination‖ means a Covered Employee’s termination of employment with McDonald’s Corporation due to: Reduction in the work force; Elimination of a position or job restructuring; Elimination of a position due to outsourcing; Termination of employment by McDonald’s Corporation without Cause if the employee executes the necessary release agreement; or Change of Control Termination for employees who are employed in the leadership compensation band or below. A Covered Termination does not include the termination of employment of (i) any employee whose performance rating is at an unacceptable level unless the termination of employment qualifies as a Change of Control Termination, (ii) an Officer of McDonald’s Corporation who is entitled to receive benefits under the McDonald’s Corporation Executive Retention Plan or (iii) a senior Officer affected by a Change of
Control who is eligible to receive benefits under a Tier I or Tier II Agreement with respect to such termination of employment. ERISA. ―ERISA‖ means the Employee Retirement Income Security Act of 1974, as amended. 31 Good Reason. ―Good Reason‖ means, solely with respect to a Covered Employee who is an Officer of McDonald’s Corporation immediately prior to a Change of Control or at any time during the Post-Change of Control Period, the occurrence of any one or more of the following actions or omissions that occurs during the Post-Change of Control Period: (a) any failure to pay the Covered Employee’s Base Salary or TIP payment when due; (b) any reduction in the Covered Employee’s Base Salary or target annual bonus under TIP; (c) any failure to provide or make available any employee or fringe benefit (including, without limitation, any medical, prescription, dental, disability, employee life, dependent life, accidental death and travel accident insurance plan or program) that is provided or made available by McDonald’s Corporation on substantially similar terms and conditions to other peer employees of McDonald’s Corporation; or (d) the failure of a successor to McDonald’s Corporation to assume and agree to be bound by this Plan; provided, however, that in the case of an act or omission described in (a) through (c) above, the Officer may terminate employment for Good Reason only if McDonald’s Corporation fails to cure such act or omission within thirty (30) days after receiving written notice from the Officer of his or her intent to terminate employment for Good Reason. McDonald’s Corporation. ―McDonald’s Corporation‖ means for purposes of this Plan, McDonald’s Corporation, its successors and assigns and its Business Unit Subsidiaries — McDonald’s USA, LLC; McDonald’s Ventures, LLC; McDonald’s Latin America, LLC; McDonald’s APMEA, LLC; McDonald’s International, LLC and McDonald’s Europe, Inc. Officer. ―Officer‖ means an employee of McDonald’s Corporation in the leadership band and above. Plan. ―Plan‖ means the McDonald’s Corporation Severance Plan as set forth in this document. Plan Administrator. ―Plan Administrator‖ means the person responsible for administration of the Plan as set forth in Article VIII of the Plan. Plan Year. The ―Plan Year‖ shall be the calendar year for record keeping purposes. Post-Change of Control Period. ―Post-Change of Control Period‖ means the twelve-month period commencing on the date a Change of Control occurs and ending on the first anniversary of such date. Prorated TIP. ―Prorated TIP‖ means the cash lump sum payment for certain Qualifying Employees described in Section 4.6 of the Plan who are eligible for a pro rata bonus under McDonald’s Target Incentive Plan. Qualifying Employee. ―Qualifying Employee‖ means each Covered Employee who meets the requirements set forth in the Plan, including without limitation the requirement to sign an agreement in accordance with Section 6.1 and not revoke or rescind the agreement. Release Date. ―Release Date‖ means the date upon which a Qualifying Employee’s signed agreement required under Section 6.1 of the Plan becomes irrevocable and non-rescindable. Schedule. ―Schedule‖ means the schedules attached as Appendix I to the Plan which describe the duration and which Severance Benefits under the Plan are available for different categories of Qualifying Employees.
Severance Benefits. ―Severance Benefits‖ means the Severance Continuation Pay and any other benefit payable pursuant to this Plan. Severance Continuation Pay. ―Severance Continuation Pay‖ means cash severance payments payable at the same time and manner as regular Base Pay over a period of time, as described in Article IV of the Plan; provided, however, that a Qualifying Employee who has had a Change of Control Termination shall receive his Severance Continuation Pay in a single lump sum payment on the later of his Termination Date or his Release Date. Subsidiaries. References under the Plan to ―Subsidiaries‖ means any entity in which McDonald’s Corporation directly or through intervening subsidiaries owns 25% or more of the total combined voting power or value of all classes of stock, or, in the case of an unincorporated entity, a 25% or more interest in the capital and profits, other than any joint venture with the operator of a McDonald’s restaurant. Termination Date. A Covered Employee’s ―Termination Date‖ is the date on which a Covered Termination becomes effective. Termination Notice Date. The date on which a Covered Employee receives notice that he or she has a Covered Termination under the Plan is referred to as the ―Termination Notice Date.‖ Tier I and Tier II Agreements. ―Tier I and Tier II Agreements‖ means the Change of Control Agreements executed by individual Officers who are in the senior leadership compensation band or above, which govern upon a Change of Control. TIP. ―TIP‖ means McDonald’s Target Incentive Plan or any annual bonus plan that replaces the Target Incentive Plan. 32 TIP-Eligible. A Qualifying Employee is ―TIP-Eligible‖ if his or her Termination Date is on or after March 1 of a calendar year and the Qualifying Employee is eligible to participate in TIP for the calendar year in which his or her Covered Termination occurs. Year of Service. A ―Year of Service‖ for purposes of computing the amount of Severance Cont